By Imee Charlee C. Delavin,
Senior Reporter

Germany offers aid in maritime, aviation, rail development

Posted on July 05, 2017

GERMANY has expressed interest in helping develop the Philippines’ maritime, rail and aviation sectors, yesterday kicking off by signing of a letter of intent to cooperate in the maritime industry to facilitate improved connectivity between the two countries.

Transportation Secretary Arthur Tugade announces the various projects in the pipeline under the “Build! Build! Build!” program during the DuterteNomics Forum at Conrad Manila in Pasay City on April 18, 2017. Photo credit:
The letter of intent -- signed on Tuesday by Transportation Secretary Arthur P. Tugade and German Federal Ministry of Transportation and Infrastructure State Secretary Michael Odenwald -- outlined increased ties between the Philippines and Germany in the field of maritime transport, through conduct of regular talks; development and implementation of maritime projects; training courses; exchange of information on marine accidents; cooperation in marine pollution prevention; and cooperation in the field of ports and maritime equipment, research and training.

“[This letter of intent] will firm up the maritime relationship between the Germany and the Philippines. This document has been pending for a number of years,” Transportation Secretary Arthur P. Tugade said in his speech before the German delegation during the signing ceremony on Tuesday in Manila.

“This is one golden opportunity where we shook hands and agreed to work together to enhance the maritime capability from sailing to training to research. We exchanged resources, and it is, on our mind a good start for a bolstered relationship with the Germany and the Republic of the Philippines,” he added.

Earlier this year, the two officials met in Germany where they had initial discussions on prospects and possibilities “to develop and implement projects of mutual interest, specifically in the fields of maritime, aviation, road transport, among others.”

In his speech during the signing ceremony, Mr. Odenwald -- who described the first discussions as a “meeting directly based on sympathy” -- said they tackled projects aimed at fostering productive relations between the two nations.

“I am convinced that we can now have a new start. That we can build on a very solid and good foundation. And you can see by the size of the delegation that I have brought with me that we are very willing to promote economic ties with the Philippines,” Mr. Odenwald said.

Mr. Odenwald and his delegation -- which consisted of businessmen and experts in the aviation and rail sectors -- are currently in Manila following Mr. Tugade’s invitation.

Mr. Odenwald said the German side is willing to share expertise.

“We are more than willing to share our knowledge and expertise in the railway sector. And I think that we should also continue this cooperation. In my delegation, we also have representatives that have a lot of expertise in the field of railway construction,” he said.

“We are very willing to continue ties in terms of aviation with your country,” he added, noting how both countries should work to further promote bilateral trade.

Mr. Tugade said he assured the German minister that businesses planning to invest in the Philippines will be assured of a level playing field that is free from corruption.

“Mr. Minister, the Republic of the Philippines is opening its doors for business. If there is one thing that I can assure you in opening its doors for business is that there shall be no corruption,” Mr. Tugade said.

One of the longest running disputes in aviation over the Philippine government and the Philippine International Airport Terminals Co., Inc.(PIATCo) -- whose foreign partner is German airport builder and operator Fraport AG -- was also resolved.

The German official said the resolution helped paved the way for more bilateral cooperation between the two countries.

“The payment of Philippine government was very important to re-establish trust. So, the step [Mr.] Tugade took was a very important step. So I think we can be very optimistic here and make a good start,” Mr.Odenwald noted.

Mr. Tugade for his part said: “Everything is put to quiet. The Fraport issue is a history, a history which should not be repeated. As mentioned earlier, we would like now to start a relationship that is predicated on mutual trust, on mutual faith, good faith, on respect for sovereignty. Let’s admit it, because of the issue on Fraport, the relationship was tainted and breached. Because it was solved ... hopefully, we can start a new life, starting with this.”

He said the pending cases in Singapore and Washington has been withdrawn, although Mr. Tugade did not disclose how much the Philippine government paid to settle the Fraport issue, saying only that the cost is “all in accordance with the decision of the Supreme Court.”

The NAIA-3 contract, awarded to PIATCo in 1997 during the Ramos administration, was declared irregular by the Arroyo administration in 2002, the year the terminal should have become operational.

Fraport -- through subsidiary, Fraport AG Frankfurt Airport Services Worldwide -- had a 30% stake in PIATCo which signed a 25 year operating contract for the terminal under the terms of a Build Operate Transfer (BOT).

The Supreme Court voided the deal in 2003 and the government moved to take over the nearly completed facility a year later as compensation talks broke down.

Fraport AG filed for arbitration before a World Bank panel on Sept. 17, 2003, claiming $425 million from the Philippine government for building the facility.

In 2015, the volume of trade between Germany and the Philippines reached 5.24 billion euros, compared with 4.8 billion in 2014. Electronic goods and electronic manufacturing machinery are the principal exports, followed by other machinery.